TPG BroadbandPlans

TPG is a Sydney-based IT and broadband supplier that has been in operation for almost 20 years. TPG markets itself as one of Australia's largest Internet Service Providers (ISP) but currently excludes Tasmania from its broadband provision. While the ISP offers NBN, ADSL 1, ADSL2, and Naked DSL, it does not offer cable broadband. ADSL1 connections ...read more

TPG is a Sydney-based IT and broadband supplier that has been in operation for almost 20 years. TPG markets itself as one of Australia's largest Internet Service Providers (ISP) but currently excludes Tasmania from its broadband provision. While the ISP offers NBN, ADSL 1, ADSL2, and Naked DSL, it does not offer cable broadband. ADSL1 connections reach speeds from 256kbps to 8000kbps. Where available, ADSL2+ and Naked DSL plans reach speeds up to 20,000kbps. Download speeds are slowed to between 64kbps and 4Mbps depending on the plan when the monthly limit is reached, so there are no extra charges for exceeding a download quota. A free spam filter, virus protection, and up to 20 email accounts are offered with every broadband plan. Web-space is also included as an extra. Connection generally takes 3-5 working days from application on an active Telstra phone line. VoIP (Voice over Internet Protocol) plans are also available and the company claims to provide some of the lowest call rates available in Australia. You will still need an active Telstra home phone line, although TPG can offer a home phone and broadband bundle for customers on an inactive line. Compare broadband plans below.

See how TPG stacks up against other providers

Compare Broadband cannot guarantee that all plans or providers shown will be available at your property address. Connection and plan availability will need to be confirmed by the internet service provider. Additional charges may apply for non-standard connections.

TPG NBN vs iiNet NBN

TPG has now been merged with iiNet

A summary of the difference between TPG NBN and iiNet NBN

TPG is the second largest internet service provider in Australia

Amrita Bala

16/08/2017 10:52 AM

Although TPG has now been merged with iiNet, creating what one could only describe as a telecom mogul in the industry, but did you know that both brands still operate as separate entities? Both TPG and iiNet also still provide unique products and services of their own, giving us Aussies a wider range of choice when it comes to choosing the most suitable broadband plans for ourselves, whether that may be TPG Nbn or iiNet Nbn. Being spoilt for choice does come with a downside, however - many usually fluster and worry as they do not know which NBN plan would suit them best. Fret not, for when it comes to TPG and iiNet, we’ve got you covered. Here is our handy article on the summary of both NBN plans compared.

TPG NBN - Call 1300 106 571

TPG is the second largest internet service provider in Australia and operates the largest mobile virtual network operator. Cool, huh? The approach that TPG takes towards internet is not too different from its brother iiNet’s approach. TPG offers an affordable NBN M Bundle at a low price of $49.99 a month, which may be ideal for students who do not want to splash out too much on internet bills. This bundle also comes with 100GB of data, which is a fair amount for those who do not stream too much on the internet.

For those who are looking at faster and better options, TPG offers a variety of limitless plans as well, ranging from their NBN SL Bundle ($59.99 - $69.99 per month), NBN FTTN M Business Bundle ($69.99 per month) and their NBN Extra Bundle, also $69.99 a month.

iiNet on its own is Australia's second-largest internet service provider with more than half a million users all around the continent. The NBN plans that iiNet offers ensure that you get the fastest possible internet connection for yourself and your family in your household.

For those who are looking at something on the more basic side of things, iiNet offers a NBN Fibre Basic 250 plan which includes 250GB of data at $59.99 a month and basic download speeds of 12Mbps. For those who are in a household of multiple internet-addicts, iiNet’s other broadband plans may be more suited to your needs.

The next upgrade after Fibre Basic would be the NBN Fibre Basic Liimitless (with unlimited data at $69.99 a month), followed by NBN Fibre Boost Liimitless and NBN Fixed Wireless Boost Liimitless (both unlimited data at $79.99 - $89.99 a month). The pricier of the plans also come with local and standard national calls on your mobile, which is a great plus point!

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Whilst both TPG and iiNet provide fantastic NBN bundles for you to enjoy, it is always advised to really take a close look at all the plans that are offered to ensure that you pick the best plan that suits your needs to a tee. Still have questions? Don’t hesitate to hit us up on with any queries you may have or Call 1300 106 571

Optus vs TPG

TPG and Optus battle for #2

Each targets different customer types

Different approaches, but both offer innovative pricing models

Adam Wajnberg

16/08/2017 10:47 AM

Ed Note: With the recent Optus price rise, we have published an article offering viable alternatives to popular Optus plans. You can access this article by clicking here.

Optus and TPG plans don’t share a great deal in common, at first blush. Optus broadband competes in the premium end of the market with Telstra and iiNet/Internode. TPG competes with low-cost providers like Dodo and Exetel. So why compare the two?

For starters, comparing TPG to other ‘cheap and cheerful’ ISPs charging the same amount is not fair. TPG runs basic, text-based ads, offers seemingly impossible deals on Unlimited broadband, and their website has no blog or other friendly bits and pieces. Their customer service is mostly based offshore, and their plans have a basic ‘like it or lump it’ quality that matches other small-time providers. But the difference is that TPG doesn’t just take those savings and bank them. TPG is the one provider that treats broadband as the un-sexy utility that many people perceive it to be, and invests heavily in making sure that its infrastructure WORKS – never mind the ads showing families getting in touch; here’s a tap, and the internet is going to come out of it. So while TPG has a cheap weatherboard frontage, inside it’s marble and polished wood.

Optus, on the other hand, is high class throughout. Its public image, using cute and curious animals in their advertising, conveys a dynamic but also family friendly provider – a safe company that will be around a long time. They have mobile towers, interstate networks and cable networks. Their name can be seen on the occasional streetpost near cable trenches. Optus is the largest telco in Australia built from the ground up – Telstra may be twice the size, but much of its strength comes from the control of the system it inherited. Optus inherited some satellites; everything else was built in the last 20 years.

The reason why TPG and Optus offer a stark basis for comparison is this – TPG is the cold, hard face of competition. Optus is cuddlier, but was specifically built to be the competition. Which one actually offers better value for the end user?

What TPG does right

First there was the landline telephone. Everyone had one. After that, everyone got a mobile. But they kept the telephone around because mobile calls were prohibitively expensive.

Then everyone got ADSL. The telephone line can provide ADSL because it contains two copper wires – and ADSL simply activates a digital internet connection on the line not being used for telephone. So phone + internet was a natural bundle; everyone had a landline, so activating ADSL was a natural progression, and it was natural to bundle the services with one provider.

Then came mobile cap plans, offering oodles of credit for a low monthly fee. Everyone stopped using their landline, or not bothering to connect it at a new address at all.

This is where TPG comes in. TPG recognizes that many people don’t want a home phone at all, but DO want reliably fast and plentiful broadband connection. The technological (and economic) reality is more complicated – you MUST have a landline connection to get ADSL. You MUST pay line rental to rent that line for ADSL – whether you use the associated phone service or not. There’s Naked DSL, which supposedly offers this – but not really. All Naked DSL does is offer broadband and line rental wrapped in one price, with no home phone service – it’s not cheaper, and in fact it’s usually more expensive. It’s also harder for an ISP to arrange, for a whole host of reasons.

So TPG stripped away most of the unnecessary baggage that comes with line rental and phone, to cut down on price. Some of your line rental pays for a battery backup of your line, to provide a dial tone even when there’s a general power outage. But most people have mobiles, so let’s take out that charge.

Some of your line rental goes towards Telstra’s Customer Service Guarantee. This is a guarantee on major line repairs. If your line goes down, you can claim back a portion of your line rental for the time it takes to repair it. In reality, this happens very rarely, and rarely takes more than 3 or 4 days to repair. So if line rental is about $30 a month, and your service is down for 4 days, then the rebate you can claim back is around…$4. For this, you pay a lot for standard line rental.

Part of your line rental pays for compatibility with services like Priority Assist, Faxstream Duet (fax line), back-to-base alarm system, and other ‘dial-back’ services that use the landline to make automated connections. Not gonna miss them? Good, because TPG stripped that away too.

So TPG got rid of all of this, leaving just the most basic line rental, and reducing the cost to customers who don’t need the line for phone – they just need the line for broadband. As for the Unlimited data part – TPG can do that because they don’t rely on Telstra or Optus for ‘backhaul’ like everyone else. They have their own undersea fibre optic cable connecting Australia to Guam, which is in turn a central switching point for direct connections to the USA, Europe and Asia. TPG is, with Telstra and Optus, the only other ‘inter’ internet provider.

In addition – TPG realizes that most people are tired of 24 month contracts. Long contracts are an insurance policy for telecommunications companies, a tacit admission that their network and customer service are going to disappoint eventually, but in order to keep you on their books, they can use contracts to lock you in. This is expensive. It means that an ISP has to offer freebies, like free connections and free modems. It also means that your average telco has a bunch of customers that are both unhappy with their service, and vengeful over their telco’s inflexibility. Those customers are in a hurry to leave when their contract is up – not just to get a better deal, but to also ‘get back’ at their old ISP. That’s Bad Mojo.

TPG limit most of their plans to 6 or 12 months, charging upfront for connections and modems, or relying on the fact by now, many people already have a compatible modem. That way, if you’re not happy with your service, at least you won’t be shackled to TPG and building resentment against them – they then have a better chance of winning you back later, once their network improves.

So what TPG does right is offer the highest amount of data on a fully-backed international connection, for the lowest price, and under the fairest terms. Their phone offerings are pretty basic – Telstra rates for calls, with the option to pay $10 extra for unlimited local calls, landline calls and 100 international minutes to boot. And that’s it. Otherwise, you have a phone line with such limited capacity that you may as well not even plug in a telephone (and TPG won’t provide you with one), that comes with a high speed unlimited broadband service behind it. It’s like buying the full Happy Meal because just buying a cheeseburger and coke would be more expensive. TPG could run an obscure ad campaign with: “TPG. Just Throw Away The Fries”. Only I would get it, but that doesn’t mean it doesn’t make some sense.

What Optus Does Right

Optus has to have a different profile. Its customers and shareholders have invested in a top-tier provider, a company whose very existence depends on you not wanting to be with Telstra. But that also means they have to offer a version of everything Telstra does, to appeal to the broadest range of customers possible.

That said, Optus makes a go of meeting the actual demands of the market. Telstra can maintain all they like that what people want is a good old fashioned home phone service; home phone is their cash cow. For everyone else, home phone is something they offer and which they rent off Telstra – every home phone service a non-Telstra company signs up, means more money to Telstra.

Optus can get around that. It has jumped into the Naked Broadband waters, realizing that it wasn’t going to make its money on home phone. It has concentrated on mobile, offering Timeless plans that come with unlimited calls, text and lots of data, while still offering the latest handsets. They have embraced prepaid. But most importantly, they have embraced a new role as the Telstra of mobile.

Telstra provides wholesale access to everyone else on a few different levels. The small one is backhaul- many ISPs use Telstra’s interstate and international networks, but they have plenty of competition from Optus, TPG, Internode, iPrimus, etc. Telstra also provide wholesale access of ADSL – to small ISPs, but also big ISPs in areas that their own networks don’t extend to.

But the big, big, big part of Telstra’s wholesale business is in ‘the last mile’. This encompasses the 12 million or so connections from neighbourhood exchanges to every. Single. Premises. That’s homes, flats, units, businesses, bus stops, doghouses – 99% of the complexity of building a network is in this part of it, and that’s all Telstra.

Optus has a big mobile network. Not only does it have thousands of towers, 3G dishes and antennas over the Aussie landscape, they also have international connection points thanks to them being owned by SingTel, a Singaporean telecoms giant that dwarfs Telstra. Optus’ 8 million mobile customers make up…wait for it…1.8% of SingTel’s 434 million subscriber base.

Without getting too technical, Optus’ foreign connection does provide it with a lot more scale for providing wholesale mobile and mobile broadband access. Telstra is also very stingy when it comes to mobile access – to date it has wholesales to exactly one provider, JB Hi-Fi, with a very small range of plans (and those plans aren’t cheaper than going directly with Telstra). The Optus Open Network, on the other hand, provides far and away the best value mobile service in Australia, through resellers like Amaysim (1300 302 942) and Dodo (1300 136 793).

Meanwhile, Optus also wholesales its ADSL network at a much more accommodating rate than Telstra does. This allows companies like iPrimus (1300 137 794) to break through with great value Naked Broadband plans.

So what Optus does right is use their size and scope to play two different games- offering a family friendly, comprehensive, top-tier experience to those willing to pay for it, while also using their wholesale network to effectively capture the more savvy customers who know what they want. In turn, ideas that are successful in the wider marketplace can get incorporated into Optus’ own stable of products. Case in point – Optus now has unlimited mobile plans, 20GB mobile broadband plans, and Naked broadband plans on both ADSL and Cable. These are the product offerings of a small and innovative company, not a big behemoth.

You CAN get an unlimited Naked DSL plan from TPG, where you get no phone line at all, and just broadband through your copper line. BUT…it’s $70 a month, with a $129 connection fee. It might seem to make no sense – why pay MORE just to not have a telephone service? Even more frustrating – TPG cannot connect a naked service on an inactive, or ‘vacant’ phone line. They can only CONVERT your line to Naked if it already has a dial tone on it. It sounds backwards, but there are technological reasons for it. At the end of the day, getting the cheaper and easier-to-arrange bundle, and then not using the phone line is a better option. The main benefit of Naked DSL is slightly faster speeds – if every megabit-per-second counts, then it might be worth the hassle.

If you DO need a phone line to make calls on, then the same plan is available for $69.95, with free local and STD calls, 100 minutes of free international calls and a free Wi-Fi modem. $110 connection fee, 24 month contract.

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Optus will provide Naked Broadband via ADSL2+ or Cable,whichever is available (priority is to Cable connections). For $69.99, you get 150GB of data, split into 75GB peak and 75GB off-peak. It’s a decent plan for medium users who want the least amount of fuss possible, and comes with a Wi-Fi modem. The total connection fees come to $100, on a 24 month contract. For $10 more, you can get 500GB (250 peak and 250 off-peak).

For those who need the phone line, Optus Fusion Bundles provide the most comprehensive call plans available. The blue-ribbon plan is the $109 Fusion Bundle, which includes free calls to local, STD and any mobile network, 500GB data (with no peak or off peak splits!), free Wi-Fi modem and free connection on a 24 month contract. The same plan is available from $79, with 120GB data and free calls to local, STD and Optus mobile numbers only; it also goes up to 1000GB of data for $129 a month.

Optus has added some odd frankendeals lately. These are deals with very specific markets in mind – if they suit, they’re fantastic, but if they don’t, they’re best regarded as interesting experiments. The first is a $60 Home Advantage plan. This is a 2 year home phone contract, with free calls to everything – local, STD and all mobiles. With this, you get a free, 50 GB, no contract fixed line broadband connection – ADSL or Cable – with a free connection and free Wi-Fi modem.

The mobile version of this deal is $89, includes free calls to local, STD and all mobiles, and comes with a free handset – and we’re talking good handsets here, including the HTC One X and the Samsung Galaxy S3 (iPhones starts from an extra $5 a month with this deal). And then you get that free, no contract, 50GB broadband connection.

The caveat – If you need more than 50GB from time to time, stay away. You can’t upgrade – upgrading means taking up an additional service. If you drop the broadband, the deals by themselves aren’t terribly competitive. But if this fits right in with your needs, it’s a great offer. And at the very least, it demonstrates that Optus are willing to play around and try different pricing models.

Call Optus directly on 1300 137 897 for information on these deals.

Conclusion

TPG’s best value plans are suited towards non-landline phone users. Optus’ best value plans are suited to people who still rely on the landline – but both offer good alternatives. When broken down, their prices actually come out similar, with Optus usually needing less cash upfront and offering a wider range of payment options – but also needing 24 month contracts. But both companies are taking chances and offering innovative solutions, while still maintaining deep networks.

Why are TPG and Dodo so cheap, and Telstra so expensive?

What's the catch with cheap plans?

How can some providers provide so many free calls?

What is contention ratio?

Adam Wajnberg

16/08/2017 10:24 AM

When hunting around for a broadband connection, you might eventually find that prices fall into a handful of trenches – very cheap plans with tons of data, expensive plans with lots of services (some of which you may not need) and then BigPond, which is in a price universe all its own.

But why is there such a big price difference between the low and high end of the market? What’s the value differentiator? We all like paying the cheapest price possible, but there’s that aching ‘too good to be true’ sense you get when you see a massive gulf between two companies.

It doesn’t seem right, does it? The TPG plan contains, pound for pound, more value than either the Optus or BigPond plan – but the Optus plan is still reasonable in comparison, while the BigPond plan, to many eyes, seems outrageously expensive. What could Telstra broadband be offering to justify such a gap in price?

Differentiators

Each company that provides telecommunications has a pretty standard checklist of expenses that they have to pay for. In a very, very simplified form, this might be broken down as:

1. Wholesale access price to the infrastructure (ie. cables and networks) that deliver your connection)2. Payroll for customer service, technical support and credit management3. Payroll for engineering staff and back office4. Advertising

An ISP can limit their exposure to these costs in the following ways:

1. Owning their own infrastructure, rather than leasing it off another firm2. Outsourcing customer service and technical support to offshore middle-income economies like India and the Phillipines, 3. Allowing for automatic direct debit only, billing in advance instead of in arrears, so there’s no chasing up customers for unpaid bills4. Outsourcing engineering to contractors5. Keeping advertising to a relative minimum

The three examples we’ve chosen are for companies who are ‘majority wholesalers’. Telstra, Optus and TPG all own their own fibre-optic network, equipment at the exchange, and even their own undersea links. That makes a big difference – it means that for 99% of the connection (100% in Telstra’s case), they own and operate the equipment ferrying your connection to the rest of the world, and don’t have to lease a circuit on another company’s network. For Optus and TPG, the only bit they have to lease is the copper line from the exchange to your home, which belongs to Telstra.

All three companies will engage in some offshoring, either in whole or in part, of their customer service and technical support teams.

TPG has the cheapest and simplest advertising, with print, radio and TV ads that contain no actors, just a price and checklist of what’s on offer. Telstra and Optus have comprehensive national campaigns across all media, as well as huge sponsorship agreements.

Telstra and Optus have the profile of being ‘carrier-grade’. They both own huge mobile networks, satellite links and other hard infrastructure that dwarfs TPG. This contributes to their higher pricing, but their ability to control so much of the delivery should equalize prices as well. More significantly, Telstra and Optus have a deeper brand as older, bigger companies, and they also have a direct retail presence. TPG has no retail stores of its own.

TPG uses direct debit and upfront payments to limit their exposure to unpaid bills – connection fees have to be paid on the spot, and bills are debited automatically from a savings account or credit card. This allows them to operate without debt, to an extent. But it also means that people uncomfortable with this arrangement cannot enjoy their services- this precludes people who like to pay for their bills with cash, in a post office.

Finally, in the case of Telstra being significantly more expensive than both Optus and TPG, it’s worth considering Telstra’s status as the backbone of everyone’s connection. Telstra provides service to the entire country, whereas TPG and Dodo ‘cherry pick’ the distribution areas with high populations. Telstra is the only company that can do this, as it owns the ‘last mile’ network that links every home in the country. The overheads and responsibilities on Telstra are very high, so their higher prices might be construed as their way to balance out the customers who are expensive to service, with those who are cheap to service (a form of cross subsidy). But Telstra would likely be unwilling to attribute their higher prices to that, instead relying on their still-strong brand as justification for higher prices.

Where do the free calls come from?

Phone calls are still actually quite expensive to make, at least the old fashioned way. Though it seems hard to imagine, when you make a standard voice call from Melbourne to Perth, there is an actual physical link right up to each handset. That’s an analogue call.

The alternative is to have your voice sent analogue to the exchange, where your provider repackages it as digital data, sends it along the internet, and repackages it on the other end. This is Voice Over Internet Protocol (VoIP), no question about it. But unlike VoIP connections used in your home, it incorporates the public analogue telephone service to increase ease of use and audio fidelity.

Switching a landline call to an air call is still expensive though, which is why most free call packages don’t include calls to mobiles. Optus and Telstra are able to do it mainly because they’re the biggest mobile network providers as well, meaning that the fees charged to landline providers for mobile switching goes back into their pockets anyway.

Dodo’s plan is very cheap- but Dodo doesn’t have their own wholesale network.

Internode’s plan is comparatively expensive, and comes with less data, But Internode actually do own their own wholesale network – and as part of the iiNet, are part of their 2nd largest DSL network in Australia. So what gives?

Contention

*DISCALIMER* - Boosting contention is a common method for keeping costs down and allowing for more connections, used by service providers all over the world. But no company releases official figures for how much, where and to what extent they use contention, so the following is purely conjecture.

Dodo is a majority retailer – they don’t own their own network, and rely on Optus, Telstra and Eftel to provide the bulk of their connections – mostly Optus. And even though Optus Wholesale is quite affordable for smaller ISPs, Dodo’s price is still remarkably cheap, given the factors involved. Dodo offshores its tech support and customer service, and despite some pervasive advertising, otherwise adheres to the usual cost-cutting measures for a smaller firm in a very competitive market.

The other way a small firm like Dodo can compete on price is by boosting what’s known as Contention, or Contention Ratios. A really brutal but effective metaphor is a publican cutting his beer with water, but it’s not as bad as all that.

Mobile and Cable broadband are highly contended methods of providing a broadband connection – both rely on customers connecting to a central point with limited capacity, and the more people who jump on, the less speed everyone gets. ADSL (broadband over copper telephone lines, which is the connection method we’re comparing) is less contended – your line services just your home, all the way to the exchange. The exchange is very well fed by fibre optic networks with plenty of spare capacity, and besides – there’s only a limited number of ports at each exchange. At a certain point, the capacity can’t be ‘shared’ anymore.

Or can it? Smaller firms can over-contend an individual port, effectively cutting the speed of two customers in half. Kinda. The effect is more that if one customer is completely ‘maxing out’ their connection, the other customer sharing that port will find their speed suffering.Otherwise, two customers using their connection for lower-bandwidth activities (email, browsing) will find no difference in the quality of connection.

There’s nothing wrong or underhanded with boosting contention ratios. It’s a legitimate way to offer a connection to more people, in a situation with finite resources- and it is, of course, how a companies can keep their prices low in the face of limited resources. Very few people max out their connection speed for more than a few minutes at a time (like when downloading a file, or streaming hi-def video). It can mean internet ‘traffic jams’, when everyone’s connection in a neighbourhood can get congested at busy times – like 6 pm, when everyone has gotten home from work and school and might be downloading movies to watch that evening.

Contention boosting will be less of a problem for fixed-line in the future, when all (or at least most) of the network is replaced with all fibre-optic lines, dramatically boosting the speed and capacity of networks. Or at least, contention might still be used as a cost-cutting measure, but with less noticeable effects thanks to the overall much higher speeds.

It is worth noting - companies that rely on other firms to provide more of their connection will be more likely to use contention. When deciding between two plans that look equal, it's fair to consider to what degree each company relies on another to provide the connection to the internet.

A boutique approach

Internode is more expensive because frankly, they don’t skimp on anything. Internode has always operated as something of a blue-chip, white-glove affair, a network for people who take their connections seriously. They’ve always boasted excellent technology, from the equipment they use to build their network, to the modems and routers they sell. All of their support, sales and service staff are based in Australia, well trained and able to help you with just about anything. Their senior management, right up to founder and former managing director Simon Hackett, regularly engage with their customer base on social media and discussion forums like Whirlpool.

Internode charges more to pay for this extra level of service, and keeps their data limits lower to avoid having to boost contention ratios, or taking other steps that might inadvertently lower the quality of their network.

Conclusion

It’s worth doing your homework before signing up for a plan, but the main differentiators between providers can be more or less summarized like this:

Telstra, Optus – Carrier grade, you’re paying as much for brand as you are for service. TPG, Primus, Eftel – all wholesalers in their own right, lower prices might just be lower because their overheads are lower.

Internode, iiNet – huge wholesale network, but prices are higher to pay for onshore support and service

As always, give us a call on 1300 106 571 and we can help narrow down the wide range of options to a few providers who suit your needs!

Why are there major price differences between TPG and Telstra?

TPG offers users their Standard plan with Unlimited Data at just $59.99 a month, with no lock-in contract.

Why is it that a 500GB plan with Telstra NBN costs you almost DOUBLE that of an unlimited data plan with Dodo or TPG?

Telstra is a massive company that does indeed pump a lot of funds into areas such as advertising, technical support, credit management and marketing

Amrita Bala

25/05/2017 04:08 PM

When hunting around for a broadband connection, you will come across a wide variety of offers in the market. From highly affordable plans that provide you with heaps of data, to pricier options that come alongside a wide variety of bonus services - there is always a bundle or deal that is suited to any and every individual’s needs. With this said, have you ever wondered why there seems to be such a huge price gap between the low and high end of the market when it comes to something as ubiquitous as an internet connection?

Being the human beings that we are, all of us love a great deal. We all like paying the cheapest prices whenever possible, but are also often plagued by a ‘too good to be true’ sense that you get when you notice a massive gulf between two companies. So, why are some companies offering services that are cheap as chips, and others providing exorbitantly priced services to users?

First of all, let us look into 3 popular plans from TPG, Dodo and Telstra. TPG offers users their Standard plan with Unlimited Data at just $59.99 a month, with no lock-in contract. Similarly, Dodo offers users their Unlimited Data plan at also $59.99 a month on their standard speed. From a financial point of view, you are truly getting a bang for your buck with these cost-friendly plans. However, when we look at Telstra’s plans, we see that bundles start off at $90 per month for just 500GB of data and go up to a whopping $140 a month for 1500GB of data (also known as unlimited to most folks).

So, why is it that a 500GB plan with Telstra NBN costs you almost DOUBLE that of an unlimited data plan with Dodo or TPG? It doesn’t seem right, does it? Well, in order to find out the answer as to why TPG and Dodo are so cheap whilst Telstra is so expensive, we need to look into the various differentiators when it comes to how these companies.

Each company that provides telecommunications to the general public has a pretty standard checklist of expenses that they have to pay for. In a very, very simplified form, this might be broken down into sectors such as Wholesale Access Price to Infrastructure (ie cables and networks that deliver your connection), Payroll for Customer Service, Technical Support, Credit Management, Engineering Staff and Back Office. On top of that, budget has to be spent on Advertising and Marketing as well.

An ISP can limit their exposure to these costs in a few ways, whether it comes down to them owning their own infrastructure rather than leasing it off another firm. Furthermore, costs can be cut by outsourcing customer service and technical support to offshore middle-income companies such as the Phillipines and India. Allowing for automated Direct Debit only, billing in advance instead of in arrears (thus eliminating chasing up customers for unpaid fees), outsourcing engineering to contractors and minimal spending on marketing and advertising are also other strategies that an ISP can use to reduce their costs.

Thus, with all these factors taken into consideration, you can understand or start to see why there may be such huge price gaps between various ISPs and the services that they provide. Because Telstra is a massive company that does indeed pump a lot of funds into areas such as advertising, technical support, credit management and marketing, you will be expecting to see higher prices when it comes to their NBN connections, as compared to companies such as TPG and Dodo. At the end of the day, the decision is truly up to you - what do you think suits your needs best? Which company provides you with exactly what you are looking for? Higher prices do often come with slightly more perks, but if you are looking for a simple and basic NBN connection, then you may benefit from choosing an ISP that provides fluff-free services at a lower cost.

TPG is a Sydney-based IT and broadband supplier that has been in operation for almost 20 years. TPG markets itself as one of Australia's largest Internet Service Providers (ISP) but currently excludes Tasmania from its broadband provision. While the ISP offers NBN, ADSL 1, ADSL2, and Naked DSL, it does not offer cable broadband. ADSL1 connections reach speeds from 256kbps to 8000kbps. Where available, ADSL2+ and Naked DSL plans reach speeds up to 20,000kbps. Download speeds are slowed to between 64kbps and 4Mbps depending on the plan when the monthly limit is reached, so there are no extra charges for exceeding a download quota. A free spam filter, virus protection, and up to 20 email accounts are offered with every broadband plan. Web-space is also included as an extra. Connection generally takes 3-5 working days from application on an active Telstra phone line. VoIP (Voice over Internet Protocol) plans are also available and the company claims to provide some of the lowest call rates available in Australia. You will still need an active Telstra home phone line, although TPG can offer a home phone and broadband bundle for customers on an inactive line. Compare broadband plans below.

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TPG NBN vs iiNet NBN

TPG has now been merged with iiNet

A summary of the difference between TPG NBN and iiNet NBN

TPG is the second largest internet service provider in Australia

Amrita Bala

16/08/2017 10:52 AM

Although TPG has now been merged with iiNet, creating what one could only describe as a telecom mogul in the industry, but did you know that both brands still operate as separate entities? Both TPG and iiNet also still provide unique products and services of their own, giving us Aussies a wider range of choice when it comes to choosing the most suitable broadband plans for ourselves, whether that may be TPG Nbn or iiNet Nbn. Being spoilt for choice does come with a downside, however - many usually fluster and worry as they do not know which NBN plan would suit them best. Fret not, for when it comes to TPG and iiNet, we’ve got you covered. Here is our handy article on the summary of both NBN plans compared.

TPG NBN - Call 1300 106 571

TPG is the second largest internet service provider in Australia and operates the largest mobile virtual network operator. Cool, huh? The approach that TPG takes towards internet is not too different from its brother iiNet’s approach. TPG offers an affordable NBN M Bundle at a low price of $49.99 a month, which may be ideal for students who do not want to splash out too much on internet bills. This bundle also comes with 100GB of data, which is a fair amount for those who do not stream too much on the internet.

For those who are looking at faster and better options, TPG offers a variety of limitless plans as well, ranging from their NBN SL Bundle ($59.99 - $69.99 per month), NBN FTTN M Business Bundle ($69.99 per month) and their NBN Extra Bundle, also $69.99 a month.

iiNet on its own is Australia's second-largest internet service provider with more than half a million users all around the continent. The NBN plans that iiNet offers ensure that you get the fastest possible internet connection for yourself and your family in your household.

For those who are looking at something on the more basic side of things, iiNet offers a NBN Fibre Basic 250 plan which includes 250GB of data at $59.99 a month and basic download speeds of 12Mbps. For those who are in a household of multiple internet-addicts, iiNet’s other broadband plans may be more suited to your needs.

The next upgrade after Fibre Basic would be the NBN Fibre Basic Liimitless (with unlimited data at $69.99 a month), followed by NBN Fibre Boost Liimitless and NBN Fixed Wireless Boost Liimitless (both unlimited data at $79.99 - $89.99 a month). The pricier of the plans also come with local and standard national calls on your mobile, which is a great plus point!

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Whilst both TPG and iiNet provide fantastic NBN bundles for you to enjoy, it is always advised to really take a close look at all the plans that are offered to ensure that you pick the best plan that suits your needs to a tee. Still have questions? Don’t hesitate to hit us up on with any queries you may have or Call 1300 106 571

Optus vs TPG

TPG and Optus battle for #2

Each targets different customer types

Different approaches, but both offer innovative pricing models

Adam Wajnberg

16/08/2017 10:47 AM

Ed Note: With the recent Optus price rise, we have published an article offering viable alternatives to popular Optus plans. You can access this article by clicking here.

Optus and TPG plans don’t share a great deal in common, at first blush. Optus broadband competes in the premium end of the market with Telstra and iiNet/Internode. TPG competes with low-cost providers like Dodo and Exetel. So why compare the two?

For starters, comparing TPG to other ‘cheap and cheerful’ ISPs charging the same amount is not fair. TPG runs basic, text-based ads, offers seemingly impossible deals on Unlimited broadband, and their website has no blog or other friendly bits and pieces. Their customer service is mostly based offshore, and their plans have a basic ‘like it or lump it’ quality that matches other small-time providers. But the difference is that TPG doesn’t just take those savings and bank them. TPG is the one provider that treats broadband as the un-sexy utility that many people perceive it to be, and invests heavily in making sure that its infrastructure WORKS – never mind the ads showing families getting in touch; here’s a tap, and the internet is going to come out of it. So while TPG has a cheap weatherboard frontage, inside it’s marble and polished wood.

Optus, on the other hand, is high class throughout. Its public image, using cute and curious animals in their advertising, conveys a dynamic but also family friendly provider – a safe company that will be around a long time. They have mobile towers, interstate networks and cable networks. Their name can be seen on the occasional streetpost near cable trenches. Optus is the largest telco in Australia built from the ground up – Telstra may be twice the size, but much of its strength comes from the control of the system it inherited. Optus inherited some satellites; everything else was built in the last 20 years.

The reason why TPG and Optus offer a stark basis for comparison is this – TPG is the cold, hard face of competition. Optus is cuddlier, but was specifically built to be the competition. Which one actually offers better value for the end user?

What TPG does right

First there was the landline telephone. Everyone had one. After that, everyone got a mobile. But they kept the telephone around because mobile calls were prohibitively expensive.

Then everyone got ADSL. The telephone line can provide ADSL because it contains two copper wires – and ADSL simply activates a digital internet connection on the line not being used for telephone. So phone + internet was a natural bundle; everyone had a landline, so activating ADSL was a natural progression, and it was natural to bundle the services with one provider.

Then came mobile cap plans, offering oodles of credit for a low monthly fee. Everyone stopped using their landline, or not bothering to connect it at a new address at all.

This is where TPG comes in. TPG recognizes that many people don’t want a home phone at all, but DO want reliably fast and plentiful broadband connection. The technological (and economic) reality is more complicated – you MUST have a landline connection to get ADSL. You MUST pay line rental to rent that line for ADSL – whether you use the associated phone service or not. There’s Naked DSL, which supposedly offers this – but not really. All Naked DSL does is offer broadband and line rental wrapped in one price, with no home phone service – it’s not cheaper, and in fact it’s usually more expensive. It’s also harder for an ISP to arrange, for a whole host of reasons.

So TPG stripped away most of the unnecessary baggage that comes with line rental and phone, to cut down on price. Some of your line rental pays for a battery backup of your line, to provide a dial tone even when there’s a general power outage. But most people have mobiles, so let’s take out that charge.

Some of your line rental goes towards Telstra’s Customer Service Guarantee. This is a guarantee on major line repairs. If your line goes down, you can claim back a portion of your line rental for the time it takes to repair it. In reality, this happens very rarely, and rarely takes more than 3 or 4 days to repair. So if line rental is about $30 a month, and your service is down for 4 days, then the rebate you can claim back is around…$4. For this, you pay a lot for standard line rental.

Part of your line rental pays for compatibility with services like Priority Assist, Faxstream Duet (fax line), back-to-base alarm system, and other ‘dial-back’ services that use the landline to make automated connections. Not gonna miss them? Good, because TPG stripped that away too.

So TPG got rid of all of this, leaving just the most basic line rental, and reducing the cost to customers who don’t need the line for phone – they just need the line for broadband. As for the Unlimited data part – TPG can do that because they don’t rely on Telstra or Optus for ‘backhaul’ like everyone else. They have their own undersea fibre optic cable connecting Australia to Guam, which is in turn a central switching point for direct connections to the USA, Europe and Asia. TPG is, with Telstra and Optus, the only other ‘inter’ internet provider.

In addition – TPG realizes that most people are tired of 24 month contracts. Long contracts are an insurance policy for telecommunications companies, a tacit admission that their network and customer service are going to disappoint eventually, but in order to keep you on their books, they can use contracts to lock you in. This is expensive. It means that an ISP has to offer freebies, like free connections and free modems. It also means that your average telco has a bunch of customers that are both unhappy with their service, and vengeful over their telco’s inflexibility. Those customers are in a hurry to leave when their contract is up – not just to get a better deal, but to also ‘get back’ at their old ISP. That’s Bad Mojo.

TPG limit most of their plans to 6 or 12 months, charging upfront for connections and modems, or relying on the fact by now, many people already have a compatible modem. That way, if you’re not happy with your service, at least you won’t be shackled to TPG and building resentment against them – they then have a better chance of winning you back later, once their network improves.

So what TPG does right is offer the highest amount of data on a fully-backed international connection, for the lowest price, and under the fairest terms. Their phone offerings are pretty basic – Telstra rates for calls, with the option to pay $10 extra for unlimited local calls, landline calls and 100 international minutes to boot. And that’s it. Otherwise, you have a phone line with such limited capacity that you may as well not even plug in a telephone (and TPG won’t provide you with one), that comes with a high speed unlimited broadband service behind it. It’s like buying the full Happy Meal because just buying a cheeseburger and coke would be more expensive. TPG could run an obscure ad campaign with: “TPG. Just Throw Away The Fries”. Only I would get it, but that doesn’t mean it doesn’t make some sense.

What Optus Does Right

Optus has to have a different profile. Its customers and shareholders have invested in a top-tier provider, a company whose very existence depends on you not wanting to be with Telstra. But that also means they have to offer a version of everything Telstra does, to appeal to the broadest range of customers possible.

That said, Optus makes a go of meeting the actual demands of the market. Telstra can maintain all they like that what people want is a good old fashioned home phone service; home phone is their cash cow. For everyone else, home phone is something they offer and which they rent off Telstra – every home phone service a non-Telstra company signs up, means more money to Telstra.

Optus can get around that. It has jumped into the Naked Broadband waters, realizing that it wasn’t going to make its money on home phone. It has concentrated on mobile, offering Timeless plans that come with unlimited calls, text and lots of data, while still offering the latest handsets. They have embraced prepaid. But most importantly, they have embraced a new role as the Telstra of mobile.

Telstra provides wholesale access to everyone else on a few different levels. The small one is backhaul- many ISPs use Telstra’s interstate and international networks, but they have plenty of competition from Optus, TPG, Internode, iPrimus, etc. Telstra also provide wholesale access of ADSL – to small ISPs, but also big ISPs in areas that their own networks don’t extend to.

But the big, big, big part of Telstra’s wholesale business is in ‘the last mile’. This encompasses the 12 million or so connections from neighbourhood exchanges to every. Single. Premises. That’s homes, flats, units, businesses, bus stops, doghouses – 99% of the complexity of building a network is in this part of it, and that’s all Telstra.

Optus has a big mobile network. Not only does it have thousands of towers, 3G dishes and antennas over the Aussie landscape, they also have international connection points thanks to them being owned by SingTel, a Singaporean telecoms giant that dwarfs Telstra. Optus’ 8 million mobile customers make up…wait for it…1.8% of SingTel’s 434 million subscriber base.

Without getting too technical, Optus’ foreign connection does provide it with a lot more scale for providing wholesale mobile and mobile broadband access. Telstra is also very stingy when it comes to mobile access – to date it has wholesales to exactly one provider, JB Hi-Fi, with a very small range of plans (and those plans aren’t cheaper than going directly with Telstra). The Optus Open Network, on the other hand, provides far and away the best value mobile service in Australia, through resellers like Amaysim (1300 302 942) and Dodo (1300 136 793).

Meanwhile, Optus also wholesales its ADSL network at a much more accommodating rate than Telstra does. This allows companies like iPrimus (1300 137 794) to break through with great value Naked Broadband plans.

So what Optus does right is use their size and scope to play two different games- offering a family friendly, comprehensive, top-tier experience to those willing to pay for it, while also using their wholesale network to effectively capture the more savvy customers who know what they want. In turn, ideas that are successful in the wider marketplace can get incorporated into Optus’ own stable of products. Case in point – Optus now has unlimited mobile plans, 20GB mobile broadband plans, and Naked broadband plans on both ADSL and Cable. These are the product offerings of a small and innovative company, not a big behemoth.

You CAN get an unlimited Naked DSL plan from TPG, where you get no phone line at all, and just broadband through your copper line. BUT…it’s $70 a month, with a $129 connection fee. It might seem to make no sense – why pay MORE just to not have a telephone service? Even more frustrating – TPG cannot connect a naked service on an inactive, or ‘vacant’ phone line. They can only CONVERT your line to Naked if it already has a dial tone on it. It sounds backwards, but there are technological reasons for it. At the end of the day, getting the cheaper and easier-to-arrange bundle, and then not using the phone line is a better option. The main benefit of Naked DSL is slightly faster speeds – if every megabit-per-second counts, then it might be worth the hassle.

If you DO need a phone line to make calls on, then the same plan is available for $69.95, with free local and STD calls, 100 minutes of free international calls and a free Wi-Fi modem. $110 connection fee, 24 month contract.

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Optus will provide Naked Broadband via ADSL2+ or Cable,whichever is available (priority is to Cable connections). For $69.99, you get 150GB of data, split into 75GB peak and 75GB off-peak. It’s a decent plan for medium users who want the least amount of fuss possible, and comes with a Wi-Fi modem. The total connection fees come to $100, on a 24 month contract. For $10 more, you can get 500GB (250 peak and 250 off-peak).

For those who need the phone line, Optus Fusion Bundles provide the most comprehensive call plans available. The blue-ribbon plan is the $109 Fusion Bundle, which includes free calls to local, STD and any mobile network, 500GB data (with no peak or off peak splits!), free Wi-Fi modem and free connection on a 24 month contract. The same plan is available from $79, with 120GB data and free calls to local, STD and Optus mobile numbers only; it also goes up to 1000GB of data for $129 a month.

Optus has added some odd frankendeals lately. These are deals with very specific markets in mind – if they suit, they’re fantastic, but if they don’t, they’re best regarded as interesting experiments. The first is a $60 Home Advantage plan. This is a 2 year home phone contract, with free calls to everything – local, STD and all mobiles. With this, you get a free, 50 GB, no contract fixed line broadband connection – ADSL or Cable – with a free connection and free Wi-Fi modem.

The mobile version of this deal is $89, includes free calls to local, STD and all mobiles, and comes with a free handset – and we’re talking good handsets here, including the HTC One X and the Samsung Galaxy S3 (iPhones starts from an extra $5 a month with this deal). And then you get that free, no contract, 50GB broadband connection.

The caveat – If you need more than 50GB from time to time, stay away. You can’t upgrade – upgrading means taking up an additional service. If you drop the broadband, the deals by themselves aren’t terribly competitive. But if this fits right in with your needs, it’s a great offer. And at the very least, it demonstrates that Optus are willing to play around and try different pricing models.

Call Optus directly on 1300 137 897 for information on these deals.

Conclusion

TPG’s best value plans are suited towards non-landline phone users. Optus’ best value plans are suited to people who still rely on the landline – but both offer good alternatives. When broken down, their prices actually come out similar, with Optus usually needing less cash upfront and offering a wider range of payment options – but also needing 24 month contracts. But both companies are taking chances and offering innovative solutions, while still maintaining deep networks.

Why are TPG and Dodo so cheap, and Telstra so expensive?

What's the catch with cheap plans?

How can some providers provide so many free calls?

What is contention ratio?

Adam Wajnberg

16/08/2017 10:24 AM

When hunting around for a broadband connection, you might eventually find that prices fall into a handful of trenches – very cheap plans with tons of data, expensive plans with lots of services (some of which you may not need) and then BigPond, which is in a price universe all its own.

But why is there such a big price difference between the low and high end of the market? What’s the value differentiator? We all like paying the cheapest price possible, but there’s that aching ‘too good to be true’ sense you get when you see a massive gulf between two companies.

It doesn’t seem right, does it? The TPG plan contains, pound for pound, more value than either the Optus or BigPond plan – but the Optus plan is still reasonable in comparison, while the BigPond plan, to many eyes, seems outrageously expensive. What could Telstra broadband be offering to justify such a gap in price?

Differentiators

Each company that provides telecommunications has a pretty standard checklist of expenses that they have to pay for. In a very, very simplified form, this might be broken down as:

1. Wholesale access price to the infrastructure (ie. cables and networks) that deliver your connection)2. Payroll for customer service, technical support and credit management3. Payroll for engineering staff and back office4. Advertising

An ISP can limit their exposure to these costs in the following ways:

1. Owning their own infrastructure, rather than leasing it off another firm2. Outsourcing customer service and technical support to offshore middle-income economies like India and the Phillipines, 3. Allowing for automatic direct debit only, billing in advance instead of in arrears, so there’s no chasing up customers for unpaid bills4. Outsourcing engineering to contractors5. Keeping advertising to a relative minimum

The three examples we’ve chosen are for companies who are ‘majority wholesalers’. Telstra, Optus and TPG all own their own fibre-optic network, equipment at the exchange, and even their own undersea links. That makes a big difference – it means that for 99% of the connection (100% in Telstra’s case), they own and operate the equipment ferrying your connection to the rest of the world, and don’t have to lease a circuit on another company’s network. For Optus and TPG, the only bit they have to lease is the copper line from the exchange to your home, which belongs to Telstra.

All three companies will engage in some offshoring, either in whole or in part, of their customer service and technical support teams.

TPG has the cheapest and simplest advertising, with print, radio and TV ads that contain no actors, just a price and checklist of what’s on offer. Telstra and Optus have comprehensive national campaigns across all media, as well as huge sponsorship agreements.

Telstra and Optus have the profile of being ‘carrier-grade’. They both own huge mobile networks, satellite links and other hard infrastructure that dwarfs TPG. This contributes to their higher pricing, but their ability to control so much of the delivery should equalize prices as well. More significantly, Telstra and Optus have a deeper brand as older, bigger companies, and they also have a direct retail presence. TPG has no retail stores of its own.

TPG uses direct debit and upfront payments to limit their exposure to unpaid bills – connection fees have to be paid on the spot, and bills are debited automatically from a savings account or credit card. This allows them to operate without debt, to an extent. But it also means that people uncomfortable with this arrangement cannot enjoy their services- this precludes people who like to pay for their bills with cash, in a post office.

Finally, in the case of Telstra being significantly more expensive than both Optus and TPG, it’s worth considering Telstra’s status as the backbone of everyone’s connection. Telstra provides service to the entire country, whereas TPG and Dodo ‘cherry pick’ the distribution areas with high populations. Telstra is the only company that can do this, as it owns the ‘last mile’ network that links every home in the country. The overheads and responsibilities on Telstra are very high, so their higher prices might be construed as their way to balance out the customers who are expensive to service, with those who are cheap to service (a form of cross subsidy). But Telstra would likely be unwilling to attribute their higher prices to that, instead relying on their still-strong brand as justification for higher prices.

Where do the free calls come from?

Phone calls are still actually quite expensive to make, at least the old fashioned way. Though it seems hard to imagine, when you make a standard voice call from Melbourne to Perth, there is an actual physical link right up to each handset. That’s an analogue call.

The alternative is to have your voice sent analogue to the exchange, where your provider repackages it as digital data, sends it along the internet, and repackages it on the other end. This is Voice Over Internet Protocol (VoIP), no question about it. But unlike VoIP connections used in your home, it incorporates the public analogue telephone service to increase ease of use and audio fidelity.

Switching a landline call to an air call is still expensive though, which is why most free call packages don’t include calls to mobiles. Optus and Telstra are able to do it mainly because they’re the biggest mobile network providers as well, meaning that the fees charged to landline providers for mobile switching goes back into their pockets anyway.

Dodo’s plan is very cheap- but Dodo doesn’t have their own wholesale network.

Internode’s plan is comparatively expensive, and comes with less data, But Internode actually do own their own wholesale network – and as part of the iiNet, are part of their 2nd largest DSL network in Australia. So what gives?

Contention

*DISCALIMER* - Boosting contention is a common method for keeping costs down and allowing for more connections, used by service providers all over the world. But no company releases official figures for how much, where and to what extent they use contention, so the following is purely conjecture.

Dodo is a majority retailer – they don’t own their own network, and rely on Optus, Telstra and Eftel to provide the bulk of their connections – mostly Optus. And even though Optus Wholesale is quite affordable for smaller ISPs, Dodo’s price is still remarkably cheap, given the factors involved. Dodo offshores its tech support and customer service, and despite some pervasive advertising, otherwise adheres to the usual cost-cutting measures for a smaller firm in a very competitive market.

The other way a small firm like Dodo can compete on price is by boosting what’s known as Contention, or Contention Ratios. A really brutal but effective metaphor is a publican cutting his beer with water, but it’s not as bad as all that.

Mobile and Cable broadband are highly contended methods of providing a broadband connection – both rely on customers connecting to a central point with limited capacity, and the more people who jump on, the less speed everyone gets. ADSL (broadband over copper telephone lines, which is the connection method we’re comparing) is less contended – your line services just your home, all the way to the exchange. The exchange is very well fed by fibre optic networks with plenty of spare capacity, and besides – there’s only a limited number of ports at each exchange. At a certain point, the capacity can’t be ‘shared’ anymore.

Or can it? Smaller firms can over-contend an individual port, effectively cutting the speed of two customers in half. Kinda. The effect is more that if one customer is completely ‘maxing out’ their connection, the other customer sharing that port will find their speed suffering.Otherwise, two customers using their connection for lower-bandwidth activities (email, browsing) will find no difference in the quality of connection.

There’s nothing wrong or underhanded with boosting contention ratios. It’s a legitimate way to offer a connection to more people, in a situation with finite resources- and it is, of course, how a companies can keep their prices low in the face of limited resources. Very few people max out their connection speed for more than a few minutes at a time (like when downloading a file, or streaming hi-def video). It can mean internet ‘traffic jams’, when everyone’s connection in a neighbourhood can get congested at busy times – like 6 pm, when everyone has gotten home from work and school and might be downloading movies to watch that evening.

Contention boosting will be less of a problem for fixed-line in the future, when all (or at least most) of the network is replaced with all fibre-optic lines, dramatically boosting the speed and capacity of networks. Or at least, contention might still be used as a cost-cutting measure, but with less noticeable effects thanks to the overall much higher speeds.

It is worth noting - companies that rely on other firms to provide more of their connection will be more likely to use contention. When deciding between two plans that look equal, it's fair to consider to what degree each company relies on another to provide the connection to the internet.

A boutique approach

Internode is more expensive because frankly, they don’t skimp on anything. Internode has always operated as something of a blue-chip, white-glove affair, a network for people who take their connections seriously. They’ve always boasted excellent technology, from the equipment they use to build their network, to the modems and routers they sell. All of their support, sales and service staff are based in Australia, well trained and able to help you with just about anything. Their senior management, right up to founder and former managing director Simon Hackett, regularly engage with their customer base on social media and discussion forums like Whirlpool.

Internode charges more to pay for this extra level of service, and keeps their data limits lower to avoid having to boost contention ratios, or taking other steps that might inadvertently lower the quality of their network.

Conclusion

It’s worth doing your homework before signing up for a plan, but the main differentiators between providers can be more or less summarized like this:

Telstra, Optus – Carrier grade, you’re paying as much for brand as you are for service. TPG, Primus, Eftel – all wholesalers in their own right, lower prices might just be lower because their overheads are lower.

Internode, iiNet – huge wholesale network, but prices are higher to pay for onshore support and service

As always, give us a call on 1300 106 571 and we can help narrow down the wide range of options to a few providers who suit your needs!

Why are there major price differences between TPG and Telstra?

TPG offers users their Standard plan with Unlimited Data at just $59.99 a month, with no lock-in contract.

Why is it that a 500GB plan with Telstra NBN costs you almost DOUBLE that of an unlimited data plan with Dodo or TPG?

Telstra is a massive company that does indeed pump a lot of funds into areas such as advertising, technical support, credit management and marketing

Amrita Bala

25/05/2017 04:08 PM

When hunting around for a broadband connection, you will come across a wide variety of offers in the market. From highly affordable plans that provide you with heaps of data, to pricier options that come alongside a wide variety of bonus services - there is always a bundle or deal that is suited to any and every individual’s needs. With this said, have you ever wondered why there seems to be such a huge price gap between the low and high end of the market when it comes to something as ubiquitous as an internet connection?

Being the human beings that we are, all of us love a great deal. We all like paying the cheapest prices whenever possible, but are also often plagued by a ‘too good to be true’ sense that you get when you notice a massive gulf between two companies. So, why are some companies offering services that are cheap as chips, and others providing exorbitantly priced services to users?

First of all, let us look into 3 popular plans from TPG, Dodo and Telstra. TPG offers users their Standard plan with Unlimited Data at just $59.99 a month, with no lock-in contract. Similarly, Dodo offers users their Unlimited Data plan at also $59.99 a month on their standard speed. From a financial point of view, you are truly getting a bang for your buck with these cost-friendly plans. However, when we look at Telstra’s plans, we see that bundles start off at $90 per month for just 500GB of data and go up to a whopping $140 a month for 1500GB of data (also known as unlimited to most folks).

So, why is it that a 500GB plan with Telstra NBN costs you almost DOUBLE that of an unlimited data plan with Dodo or TPG? It doesn’t seem right, does it? Well, in order to find out the answer as to why TPG and Dodo are so cheap whilst Telstra is so expensive, we need to look into the various differentiators when it comes to how these companies.

Each company that provides telecommunications to the general public has a pretty standard checklist of expenses that they have to pay for. In a very, very simplified form, this might be broken down into sectors such as Wholesale Access Price to Infrastructure (ie cables and networks that deliver your connection), Payroll for Customer Service, Technical Support, Credit Management, Engineering Staff and Back Office. On top of that, budget has to be spent on Advertising and Marketing as well.

An ISP can limit their exposure to these costs in a few ways, whether it comes down to them owning their own infrastructure rather than leasing it off another firm. Furthermore, costs can be cut by outsourcing customer service and technical support to offshore middle-income companies such as the Phillipines and India. Allowing for automated Direct Debit only, billing in advance instead of in arrears (thus eliminating chasing up customers for unpaid fees), outsourcing engineering to contractors and minimal spending on marketing and advertising are also other strategies that an ISP can use to reduce their costs.

Thus, with all these factors taken into consideration, you can understand or start to see why there may be such huge price gaps between various ISPs and the services that they provide. Because Telstra is a massive company that does indeed pump a lot of funds into areas such as advertising, technical support, credit management and marketing, you will be expecting to see higher prices when it comes to their NBN connections, as compared to companies such as TPG and Dodo. At the end of the day, the decision is truly up to you - what do you think suits your needs best? Which company provides you with exactly what you are looking for? Higher prices do often come with slightly more perks, but if you are looking for a simple and basic NBN connection, then you may benefit from choosing an ISP that provides fluff-free services at a lower cost.

TPG is a Sydney-based IT and broadband supplier that has been in operation for almost 20 years. TPG markets itself as one of Australia's largest Internet Service Providers (ISP) but currently excludes Tasmania from its broadband provision. While the ISP offers NBN, ADSL 1, ADSL2, and Naked DSL, it does not offer cable broadband. ADSL1 connections reach speeds from 256kbps to 8000kbps. Where available, ADSL2+ and Naked DSL plans reach speeds up to 20,000kbps. Download speeds are slowed to between 64kbps and 4Mbps depending on the plan when the monthly limit is reached, so there are no extra charges for exceeding a download quota. A free spam filter, virus protection, and up to 20 email accounts are offered with every broadband plan. Web-space is also included as an extra. Connection generally takes 3-5 working days from application on an active Telstra phone line. VoIP (Voice over Internet Protocol) plans are also available and the company claims to provide some of the lowest call rates available in Australia. You will still need an active Telstra home phone line, although TPG can offer a home phone and broadband bundle for customers on an inactive line. Compare broadband plans below.

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